California’s climate-disclosure landscape shifted again in late 2025. Most notably, the California Air Resources Board (CARB) announced it will not enforce the January 1, 2026 reporting deadline under SB 261 (climate-related financial risk) following the Ninth Circuit’s injunction staying enforcement of the statute pending appeal. CARB’s December 1, 2025 Enforcement Advisory confirms that the agency will suspend enforcement while litigation proceeds and will set a new reporting deadline once the appeal is resolved.
Meanwhile, CARB used its November 18, 2025 workshop to preview substantial implementation details for both SB 261 and SB 253 (GHG emissions reporting), which ease first-year compliance pressure and clarify expectations for covered entities.
SB 261: Enforcement Stayed and Voluntary Filing Pathway Opened
Due to developments in the federal litigation challenging these laws, CARB paused enforcement of SB 261 for the foreseeable future.
Litigation Recap
In January 2024, the U.S. Chamber of Commerce and several other plaintiffs sued CARB seeking a stay of SB 261 and 253 alleging that the laws exceeded California’s regulatory authority. The U.S. District Court for the Central District of California denied plaintiffs’ initial preliminary injunction, after which plaintiffs appealed to the U.S. Court of Appeals for the Ninth Circuit in August 2025. In September 2025, the Ninth Circuit denied plaintiffs’ motion for an injunction pending appeal, but the Court subsequently reversed course and granted the injunction as to SB 261 only on November 18, 2025.
Enforcement Paused
The Ninth Circuit’s injunction prevents CARB from enforcing SB 261 pending the outcome of the appeal. CARB’s December 1, 2025 enforcement advisory confirms that the agency “will not enforce [SB 261] against covered entities for failing to post and submit reports by the January 1, 2026, statutory deadline” during the appeal.
Future Deadlines to Be Reset
CARB will issue more information and an alternative reporting schedule after the appeal is resolved, meaning no mandatory reporting date currently applies.
Voluntary Reporting Option
In the interim, CARB opened the Climate-Related Financial Risk Reports (SB 261) Docket to accept voluntary climate-related financial risk reports.
SB 253: First-Year Timing and Requirements Clarified
Despite the SB 261 enforcement stay, SB 253 remains unaffected. At the November 18 workshop, CARB staff outlined a more workable first-year schedule and clarified reporting expectations.
Proposed First-Year Reporting Deadline
CARB tentatively proposed August 10, 2026 as the deadline for reporting Scope 1 and 2 data. This marks an improvement over CARB’s original July 1, 2026 proposal, but does not go so far as to adopt the December 31, 2026 deadline proposed by many stakeholders through public comments.
Limited Assurance Not Required for 2026
CARB confirmed that limited assurance begins in later reporting years and that initial reports in 2026 may be unaudited.
Templates Optional in 2026
CARB’s draft Scope 1 and Scope 2 GHG Reporting Template may be used for 2026 filings but is not mandatory.
Scope 3 Timing Unchanged
Scope 3 reporting remains scheduled for 2027, consistent with the statute.
Cross-Cutting Implementation Updates
CARB also released several program-wide updates relevant to both statutes.
Updated Guidance Materials
CARB’s Climate Disclosure FAQ document and Climate Related Financial Risk Report Checklist were refreshed following the workshop to reflect updates and provide additional guidance regarding implementation.
Entity-Identification Methodology
CARB reiterated that its Preliminary List of Reporting/Covered Entities was merely intended to “estimate approximate numbers of entities potentially subject” to the climate disclosure laws and is not a prescriptive compliance tool. CARB recognized several problems with the methodology used to create the Preliminary List and presented a revised approach for identifying potentially covered entities in the future. Namely, CARB is exploring using tax filing data from the Franchise Tax Board (FTB) to identify entities meeting both the “doing business” in California and “total annual revenue” requirements of the climate disclosure statutes.
Program Fee Structure Preview
CARB outlined a “flat fee” framework under which total program costs will be divided equally among the total number of regulated entities. Subsidiaries are to be counted individually for the fee assessment (subject to consolidated payment by a parent).
Extended Stakeholder Engagement
CARB will continue gathering comments through its open docket and anticipates further rulemaking activity in early 2026.
Takeaways
The post-workshop landscape now features a paused SB 261 deadline, a more manageable first-year schedule for SB 253, and a clearer picture of CARB’s anticipated reporting framework. However, key questions remain unanswered, such as how CARB will define “total annual revenue” and “doing business”, which are key to identifying entities subject to the reporting requirements. Companies preparing for California’s climate-disclosure requirements should continue building internal reporting processes—particularly for GHG emissions—while monitoring the SB 261 litigation and CARB’s forthcoming regulatory packages.
Contact our environmental team if you need help navigating the developing regulations presented in SB 253 and SB 261.
This article is part of our ongoing coverage of California’s SB 253 and SB 261.
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